Scope of The System
Before the commencement of Work Choices the Commonwealth relied on the concilliation and arbitration power of which provides that Commonwealth may make laws with respect to "conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State."
The Howard Government sought to bring as many employees under Work Choices as was within its constitutional powers.
Relying on the corporations power of Section 51(xx), the Howard Government extended the coverage of the federal industrial relations system to an estimated 85% of Australian employees. All employees of "constitutional corporations" (i.e. trading, financial, and foreign corporations) are covered by the Work Choices system. Other constitutional powers used by the Federal Government to legislate industrial relations matters include the Territories power to cover the Australian Territories, including the external territories of the Christmas and Cocos Islands, the external affairs powers, the interstate and overseas trade and commerce power, and the powers of the Commonwealth to legislate for its own employees. Victoria voluntarily referred its industrial relations powers to the Commonwealth in 1996.
While one of the purposes of these changes is to provide a single national industrial relations system, in practice, each of the States' systems (except Victoria and the Territories) remains in force. State industrial relations systems continue to apply to employers that are not covered by Federal agreements (Australian Workplace Agreements or Collective Agreements), bound to a Federal Award, or are not incorporated and trading, financial or foreign organisations. Employers that remain in the State systems include sole traders, partnerships, incorporated associations which are not 'trading and financial corporations' and state government bodies.
Court decisions may be required to establish whether an organisation falls under this definition; areas of contention include local government and incorporated associations that undertake some trading activities, such as not-for-profit organisations. There have been several test cases so far in State and Federal jurisdictions, including Jacqueline Ann Bysterveld v Shire of Cue, Western Australian Industrial Relations Commission (20 July 2007). The general principles established by this case and similar cases since the introduction of Work Choices are that the types of activities carried out by an individual organisation and the extent and value of these activities must be assessed on a case-by-case basis to determine whether the activities are considered substantially "trading and financial."
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